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NETHERLANDS - PGGM, the asset management of the €98bn healthcare scheme PFZW, is in discussions with "a number" of international companies for being active in the occupied territories in Israel.

The engagement process follows the UN Global Compact directive on companies operating in conflict zones, according to spokesman Bram van Els, who declined to provide details on the companies involved.

In a letter to the Russell Tribunal on Palestine, Hans Alders, chairman at the PFZW, wrote: "Our board is deeply concerned about the ongoing conflict between Israel and Palestine, the consequences of long-term occupation of the Palestinian territories, as well as the possible complicity of companies in violations of international law."

According to Alders, following concerns by participants and stakeholders, PFZW has asked its asset manager to develop an engagement approach with these companies, such as banks that finance settlements and manufacturers of custom-made bulldozers used for the destruction of Palestinian homes.

Alders responded after being challenged by the tribunal about its investments in Israeli companies.

However, the PFZW chairman stressed that the scheme had disinvested in almost all Israeli companies on the tribunal's list after it has changed its benchmark, "composed by external parties", last summer.

He added: "The Israeli companies were too small after being transferred from the emerging markets index to the developed markets index."

PFZW said the total assets involved were less than €323m, representing stakes 0.59% and 0.01%.

In the opinion of Adri Nieuwhof of Samora, a Swiss-based consultant on human rights and development, the PFZW's benchmark story is unconvincing, as she had already approached the pension fund on the issue in 2008.